Organic fertilizer substitution (OFS) technology effectively mitigates the adverse effects of excessive synthetic fertilizer application while promoting soil organic carbon (SOC) sequestration in farmlands. However, how the permanganate oxidizable carbon fractions (KOCs) transformation affects SOC under OFS remains unknown. In this study, two typical farmland soils (grey desert soil, GS; meadow soil, MS) were selected for a 3-year field fertilization experiment (no fertilization, NF; synthetic fertilizer alone, SCF; and organic fertilizer substituted 20% synthetic N fertilizer, OFS). Field experiments conducted from 2018 to 2020 showed that SOC could be used to evaluate wheat yield and soil quality, so further study the effects of OFS on SOC and KOCs and their corresponding C pool management index (CPMIs). The results showed that OFS in GS and MS increased SOC (by 3.37%–15.62%, 4.92%–20.28%) and its fractions content (except low-activity KOC, LKOC) and CPMIs (except CPMI-L) year by year compared to SCF and NF. The recalcitrant organic C (ROC), KOC, high-activity KOC (HKOC), and medium-activity KOC (MKOC) were the key fractions affecting SOC. Moreover, HKOC and MKOC and their corresponding CPMIs (CPMI-H and CPMI-M) showed higher sensitivity. Structural equation modeling revealed that OFS in GS and MS increased SOC by increasing ROC and KOC (by regulating KOCs transformation) content, and increased CPMI-H and CPMI-M by increasing HKOC and MKOC content. Overall, the process of OFS promoted SOC sequestration and improved soil C pool in two soils were revealed from the perspective of KOCs transformation. Also, we proposed corresponding fertilization recommendations and showed that HKOC and MKOC could be used to evaluate and monitor soil quality and SOC. This study provides guidance for SOC sequestration, crop yield, and soil quality improvement in oasis wheat fields, contributing to the sustainable development of farmland.